Banks slated to take over Granite Run Mall: update

Granite Run Mall, on US 1, west of Media, boasts Boscov's, JCPenney's, Sears, at least 100,000 square feet of vacant space, and a likely sale or transfer to creditors later this year.

Owners Simon Property Group Inc. of Indianapolis and Macerich Co., Sta. Monica, Calif., fell behind last fall on $115 million in debt on the property, according to Realpoint LLC of Horsham. Granite Run is worth around $94 million, down from more than $150 million back in 2006, according to Realpoint.

"The borrower has stated that they are unable to make future debt service payments, and want to give the property to the lender via a deed in lieu" of payment," Realpoint managing director Frank Innaurato told me. The target date for the lenders to take over is March 1.

Simon "is handling that matter, but it most likely will not be owned by that joint venture a year from now," Macerich boss Arthur M. Coppola told investors in his Feb. 8 conference call.

Simon hasn't announced its plans, which may be the news: On Feb. 4, boss David E. Simon listed six big malls he's "redeveloping" - including sites in his Indianapolis hometown and in Las Vegas, Pensacola and other warm places - and gave a partial list of 18 more he's "modernizing" - mostly in the South and Midwest.

Nothing about Granite Run. But, Simon said, "when the opportunity ceases to make sense for us, we can and will walk away." He didn't return my call seeking comment on Granite Run.

"Walk away" is what other owners have done at malls where they owed more than they wanted to pay, including Taubman Centers' Pier Shops at Caesars in Atlantic City, notes the  Wall St. Journal here.

The malls stay open, but with new owners - creditors, or bargain-hunting investors glad to buy retail real estate at a fraction of the previous price.